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7 8 9 10 11 12 We are evaluating a project that costs $800,000, has an eight-year life, and has no salvage value. Assume that

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7 8 9 10 11 12 We are evaluating a project that costs $800,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight line to zero over the life of the project, Sales are projected at 75,000 units per year. Price per unit is $50, variable cost per unit is $25, and fixed costs are $700,000 per year. The tax rate is 21 percent, and we require a return of 10 percent on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within t5 percent ) (10 points) Calculate the base-case, best-case and worst-case OCF figures (according to tax shield approach). b) (10 points) Calculate the base-case, best-case and worst-case NPV figures. A negative answer should be indicated by a minus sien. Do not round intermediate calculations and round your answers to 2 decimal places, s, 32.16.) SHOW YOUR WORK 14 15 17 16 20 21 22 23 25 26 27 ammin

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